By targeting first-time homebuyers who do not have to sell one home before buying another, most homebuilders have managed to stay afloat during the housing downturn. Nonetheless, there are still some areas where current homeowners are deciding to move on up to the next level with a new home. One of these areas is Austin, Texas, which is one reason why Wheelock Street Capital has decided to purchase The Canyons of Sweetwater project, which is a 1,600 home development project that had recently been stalled.
According to Principal Dan Green, Wheelock Street Capital intends to further develop the land, which already has some of its utilities as well as its roads. The company intends to put lots up for sale in as little as six months.
Despite the fact that homebuilder confidence has been quite low since the recession, major builders remain optimistic about Sweetwater. In fact, Austin, southern California and Raleigh in North Carolina are the only three markets where big homebuilders are still willing to purchase land outright rather than paying a smaller amount with the option to buy. On the other hand, a number of builders have taken advantage of the market downturn to purchase cheap land while also doing their best to get rid of the properties they purchased at peak prices. Those who have openly used this strategy include Toll Brothers Inc,. Meritage Homes Corp and Lennar Corp.
“To tell you who’s interested would be kind of ‘Who’s Who’ of public builders,” said Eldon Rude, who directs market research for Metrostudy. “There are not many public builders in our region that wouldn’t be interested in building homes in Sweetwater.”
Although Wheelock has not disclosed how much it paid for Sweetwater, the company has said that the average lot should come in at around $60,000. This figure represents a 25 percent decline as compared to the peak price of $80,000 for comparable land. The homes, on the other hand, are expected to go for anywhere from $250,000 to more than $1 million. In short, The Canyons of Sweetwater is offering homebuilders the opportunity to build for the more affluent citizens of Austin. Not only is the community located within a prime school district, but it is also situated in an environmentally protected part of town.
According to Richard Gollis, who is a housing consultant based in Newport Beach, California, Austin will be selling about 12,000 homes per year by 2014. While this is down from the 2006 peak rate of 16,000, it represents a significant improvement compared to the 8,000 in 2009.
Jim Olenbush is the owner of an Austin real estate company, and he maintains a webpage about The Canyons of Sweetwater at http://www.jimolenbush.com/canyons-of-sweetwater.htm
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